China today refuted the reports of an impending catastrophe of Iranian tanker which caught fire after colliding with a Chinese cargo ship off the east China coast, saying no large-scale oil spill was found in waters.

It is a race against time for authorities as 31 people of the 274-metre tanker Sanchi are still missing amid concerns that the tanker may explode. It is on fire for three days.

Authorities and environment experts have been fearful of a major environmental disaster in the East China Sea, claiming that the tanker continues to leak oil after colliding with the cargo ship.

China's Transport Ministry said that no largescale oil spill was found, according to the state-run Xinhua news agency.

A Panama-registered oil tanker, carrying 136,000 tonnes of condensate oil, caught fire on Saturday after it collided with a Hong Kong-registered bulk freighter.

Zhao Ruxiang, an expert with China's Yantai Oil Spill Response Technical Centre, said a simulation test showed condensate oil in water can evaporate so quickly that it will leave little residue, less than one per cent after five hours.

Yet it is toxic and volatile when exposed to air, with a possible risk of triggering explosions, Zhao said.